The Pakistan government has slashed gas prices for industrial consumers to Rs 500 per million British thermal units (mmbtu) from Rs 702 or $6.68per mmbtu. For export-oriented industries, it cut the gas price to Rs 400 per mmbtu from Rs 600 per mmbtu.
Commenting on this, M Babar Khan, CEO of Multinational Export Bureau, a Karachi-based textile company said he doesn’t think textile exports will show any significant improvement in the coming months despite a 33 per cent reduction in gas price for export-oriented industries. Khan cautioned that the small increase in October export numbers did not mean that textile exports had started recovering. He ruled that fundamentals were still the same for the industry and the slight increase in numbers shows that the country may have received additional support this fall.
However, Khan, whose company’s gas consumption makes up around 70 per cent of the total monthly energy bill, acknowledged that the gas price reduction announced at the end of November would have a positive impact on its earnings. After posting a continuous decline, textile exports from Pakistan showed a marginal increase in October 2016. The country’s textile shipments increased to $1.053 billion in October 2016 up by a mere 0.59 per cent compared with $1.047 billion in October 2015, according to latest available data of the Pakistan Bureau of Statistics.
Textile exports account for more than 50 per cent of total exports of Pakistan and any development related to the textile industry has a visible impact on the country’s overall exports. In the first four months (July to October) of fiscal year 2016-17, the export value of textile and clothing products stood at $4.082 billion, down 4.4 per cent compared with $4.268 billion in the same period last year.